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The Retail Stock Mistake Even Veteran Retailers Make · The Resilient Retail Game Plan - retail insights, retail trends and best practices

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  I've had retailers join Stock Doctor who've been in business for 18 years.
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  I've worked with people who've run successful stores for 10
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  years, seven years, five years.
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  These aren't beginners.
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  These aren't people who don't know what they're doing, and yet
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  almost every single one says the same thing after a few months.
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  Welcome to the Resilient Retail Game Plan.
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  I'm Catherine Erdly, and this podcast is here to share retail industry
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  trends, insights, and best practices for you, the retailer who's serious
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  about building something that lasts.
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  So the thing many retailers I've worked with have said to me after a few months…
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  I never knew that you could look at my business like this . and I find that
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  really interesting, because it wasn't like they were ignoring their numbers.
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  They were looking at Shopify, they were looking at their best sellers,
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  and they were looking at sales.
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  But what I really wanted to delve in today, and what it made me think about,
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  was the difference between looking at your numbers and really understanding
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  what the numbers are telling you.
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  And that's what I wanted to do today, show you the difference between
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  seeing the surface, and also then the kind of action that you can
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  take from reading that information.
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  So most retailers said reading the headlines, not the whole story.
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  In fact, a lot of people tell me that, "You know, I, I'm all over my numbers.
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  Every time I get a sale, my Shopify pings, or I get a notification." And I think
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  that this is one of the, the ironies of modern-day retailing, is that we have
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  this endless stream of data, but it's not the same thing as understanding what
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  we actually want to be doing with that.
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  So do you know your best sellers?
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  Lots of people will answer yes, they're, they're aware of that.
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  They see them going out all the time.
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  They see … They know which ones they're reordering.
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  But then I guess the next question would be is do you know whether they're selling
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  quickly enough, whether you should be buying twice as many, whether the
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  amount that you're buying is actually a help or a hindrance, if there's another
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  color that you could be trying instead, or what the color patterns are in your
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  business, whether one p- price point consistently wins, whether you're carrying
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  twice as much stock as you actually need, or whether maybe one category
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  or one type of product, maybe even one supplier, is funding the entire business.
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  Maybe you've got an overdependence on one of your suppliers, and that's
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  something that you need to address.
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  These are all completely different questions, and these are all completely
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  different ways of looking at your numbers as opposed to looking at the top level
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  When I think about it, I would say that it's the difference between looking
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  backwards versus making future decisions.
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  So looking backwards at your numbers is almost a bit like looking at
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  the rear view mirror, seeing the things that are going on behind you.
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  Whereas with Stock Doctor, it's almost a little bit like the sat nav.
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  We're looking at where that information should take you.
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  So what sold last month is telling you what happened, but you're not paying,
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  within Stock Doctor, you're not paying someone to tell you what happened.
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  You're paying them to tell you what that means that you should do next.
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  So we use data to make decisions.
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  We say what should happen next as a result of this information.
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  And that is the real difference.
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  And that, I believe, is what is allowing us to see these fabulous results
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  where people are getting 10% more sales on average with 10% less stock
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  and adding 5,000 pounds of profit to their bottom line per 100K of revenue.
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  So what do you need direction on?
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  Well, there's so many different decisions if you break it
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  down for every single product.
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  You're thinking, "Do I need to buy more of this? Do I need to stop buying that?
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  Do I need to clear this, not reorder that, move this, plan for Christmas now,
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  or put actions in place which means that I won't be panic buying in September?"
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  And that is where the value comes from in the Stock Doctor program.
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  This is a white glove service.
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  In other words, this is done for you.
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  Someone is going to hold your hand all the way through this.
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  They're going to run the numbers for you.
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  They're going to explain it to you clearly.
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  They're going to answer any questions that you have.
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  They're going to help you make sure that your data is clean and tidy and
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  in a really good state, ready for you to make really good decisions.
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  They're going to give you their insight and their view based on years and
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  years and years of the retail industry.
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  And I think this is one of those things about the difference, uh,
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  especially now that there are more and more tools available with AI.
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  You can ask AI for input.
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  You can ask it for what it thinks you should do.
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  But the question of whether or not it's making a good suggestion, whether
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  or not this is the right suggestion, is one that is hard to answer.
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  And one of the ways that you get the answer is by having experience, and
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  everyone who works in the Stock Doctor program has at least 15, if not closer
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  to 20 or even 25 years of experience of running these numbers and looking at them.
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  So what are we actually looking for in Stock Doctor?
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  Well- When we're analyzing a business, we're looking for things like, is
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  this stock turning too quickly?
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  Is it turning too slowly?
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  Within the stock, what product categories are driving it?
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  What suppliers are driving it?
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  Which ones are falling behind?
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  Where have we got sales that are up on the year but you haven't
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  backed that with more stock?
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  So where are you missing opportunities to grow sales?
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  Where is your cash trapped?
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  Which categories deserve more investment?
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  Which deserve less?
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  Which margins are correct and which ones need to be reviewed?
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  Where are you running out of your best sellers and that's causing you problems?
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  What's seasonal?
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  In other words, which products have a specific lifespan and
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  which products are evergreen?
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  Which ones are gonna be selling all the way around the year that
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  you can really confidently build your marketing plans behind?
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  And where have buying habits drifted?
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  So where have items or suppliers or products that maybe were the
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  mainstay of your sales previously, where have they continued to be the
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  mainstay and where have they actually shifted and now something else is
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  showing what I call green shoots?
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  So areas, pockets of stock that are turning really fast.
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  How much stock should you be holding?
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  What should your plan be?
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  What is your budget for the next few months in terms of stock?
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  When do you need to bring it in to maximize your cash flow and to
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  make sure that you're in the right position for your peak months?
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  These are not questions that you can get from having a five-minute
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  chat in, with Shopify Sidekick.
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  These are all r- questions that require analysis and thought and allow you
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  to really understand what the data is telling you and where it needs to go next.
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  So in terms of what this allows us to do, we've got clients who have got sales which
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  are up on the year with 40% less stock.
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  So this is a huge Uh, this particular client, we were able to really identify
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  low-hanging fruit, uh, stock that wasn't productive, work with them to reduce
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  it, not in a brand-damaging way, but to really work through how much stock they
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  should have, focus on the stock that they did need, and then that allowed
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  them to, to sell, have sales slightly up on the year, but 40% less stock.
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  If you think about that for a minute, that has a huge, huge
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  impact on their cash flow.
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  We've also seen businesses that have increased their sales by 20 or 30 percent
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  and they've kept their stock level, their total stock level, but the stock that
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  they have got is much more productive.
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  We've generated, as I said, around 5,000 pounds on average
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  per 100K of turnover for clients.
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  We've seen businesses have their best sales year yet.
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  We've helped businesses clear years of accumulated stock as well as get really
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  clear on what their direction should be.
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  It's not about just pure theory.
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  It's about what happens when your stock starts working really much harder.
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  I think one of the interesting things that I get asked about Stock Doctor is
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  somebody asked me the other day, "Are you more into the numbers and the finances?
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  Are you more into the product?" Or sometimes people will say to me,
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  "Well, do I need a stock doctor or do I need an accountant?" And I think
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  that the, the way that I explain it is by explaining a little bit about
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  how it works in a big retailer.
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  So in a big retailer, you have your finance team, you have a CFO, you
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  have all of the people who are in charge of effectively the accounting
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  functions, looking at the cash flow, looking at the tax burden, looking
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  at the profitability of the entire business, looking at the costs.
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  And then you have the merchandising team, which is part of the product teams.
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  We are the people who manage the sales strategy, the profit margins, the stock
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  management, as well as working with the buying team and the design team And my
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  job when I worked in those big retailers was I would give the CFO the information
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  about what our profit margins were.
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  I would tell him what we were buying when, how much stock we were
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  going to be bringing in so that he could then have a look at what
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  that meant for the whole business.
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  But then the other thing that I did was work with the buying team and
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  the design team, and I would give them my input based on numbers.
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  So they would be looking at the direction of the business, the, the creative
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  element, if you like, and I would give them advice and direction based
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  on what I could see from the numbers.
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  And that's really the way it works with Stock Doctor.
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  An accountant is really important.
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  I always say that a really good small business accountant is an important
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  person for you to have in your business.
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  It's a really important relationship.
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  And if you don't have a great relationship with your accountant,
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  then I would definitely recommend finding a different one.
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  There are some really fantastic small business accountants, including my
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  own, Kylie, at KFH Accounting, who's really good at working with small
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  businesses and small product businesses.
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  And you want someone who is gonna be on your side, who is never gonna make you
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  feel bad about asking questions, who's gonna make it really clear for you.
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  But ultimately, accountants, they are there to keep you legal, to keep you
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  out of trouble And that's their job.
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  They are not there to advise, although most of them are not
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  going to be advising you on trade.
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  They're not going to be advising you on product direction.
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  They're not necessarily even gonna be advising you on stock management,
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  because one of the things about stock is that accountants will see it as
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  an asset, whereas in Stock Doctor, we are always thinking about your cash
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  flow specifically, and we're thinking about how to trade that stock and
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  basically get the most out of that asset and try and get it turning faster.
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  So Stock Doctor will be very much focused on the numbers.
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  They are all numbers people.
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  They will run all your analysis for you, but they're never going
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  to be taking it in a vacuum though.
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  They're very much about trading, about commercial trading,
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  about making product decisions.
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  They're there to help guide you in terms of what your stock should be,
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  how much you should buy, and when you should buy it and bring it in.
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  So who uses Stock Doctor?
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  Well, people come to us for a variety of different reasons.
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  As I said, it's typically established businesses, people who maybe have multiple
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  stores, or maybe they have a single store.
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  They are people who are perhaps looking to do new things in their
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  businesses, like a pop-up or a new sales, uh, channel, and they want
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  some help putting plans in place.
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  Stock Doctors are really, really good at scenario planning, which means that
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  they're great at creating forecasts and plans for scenarios that don't exist yet.
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  So maybe you're moving to a new store, maybe you're going to do a
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  pop-up or an event, and you really could use some help with working
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  out how much stock you need to have.
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  Stock Doctors are great at that.
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  They're also really great if you don't have a lot of history, if you're fast
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  growth, if you're somebody who's just started selling really well right out the
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  gate and you're seeing really fast growth and you don't know how to plan for that.
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  You don't know how to get enough stock in place to make sure that you have
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  got what you need to do the sales potential They're really great at helping
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  people navigate that sort of growth.
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  They're also really great at working with people who just really feel like
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  the business should be more profitable, who feel like that they're overstocked,
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  and they've kind of run out of ideas of how to manage the stock themselves.
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  They're great at walking in when you have got yourself into a tangle and
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  you feel like you've got too much stock and you tried to fix it, but
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  then you ran out of other things.
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  Or maybe you're stuck in a plateau.
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  Maybe you know that this business has got really great potential, but you're not
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  really sure how to move it forward, and you want someone who's gonna come in and
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  help you really understand if your stock is working hard enough, if it is doing
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  what it should be doing, and how you can make it better and how you can improve it.
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  It's also really great for people who have got to a position where they're feeling
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  burnt out, uh, or maybe they just feel like there must be more to this, and they
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  know that they're winging it, and they kind of have got to the end of everything
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  that they can do f- without outside input.
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  They want someone now who's an expert to come in to help them sort through it.
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  So there's lots of different reasons why people come in to Stock
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  Doctor, but the outcome is the same.
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  We can help you look at your business.
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  We can help you put in realistic plans, create an idea of what you need to do to
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  move the business forward and make sure that your stock is moving as fast as it
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  can and being as productive as possible.
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  They want someone-- I would say the other thing that really unites Stock
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  Doctor clients is that they know that this stuff is really important, and they
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  just simply don't have time for it, so they want someone to come in to really
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  hand-hold and to look after them, to run their numbers for them, and to present
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  back to them each month so that they know clearly what it is that they need to do.
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  I hope that today's episode has given you an idea of how Stock Doctors can help.
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  The difference isn't between retailers who look at their
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  numbers and retailers who don't.
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  It's really between retailers who collect data and the retailers who know how to
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  turn that data into better decisions, and that's what Stock Doctor does.
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  It's a partnership.
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  We're here to support you.
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  We're here to really make sure that you get what you need out of the
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  service and you get the information you need to move you forward.
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  It's not about having access to magical reports or secret software,
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  but it's because we've spent decades learning this stuff, learning what
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  the numbers are actually trying to tell us and how to take action in a
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  way that actually moves the needle.
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  If you want to know more about our Stock Doctor service, head
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  over to stockdoctor.net where you'll see testimonials, more
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  information about how it works, as well as our latest availability.
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  Why not like, follow, or subscribe the podcast if you've enjoyed this
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  episode, and you'll be the first to know about each new episode when
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  it comes out on Thursday morning.
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  See you next week